The following information was released by Connecticut Senator Chris Dodd:

Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban
Affairs, today commended a major participant in the mortgage lending industry on its decision
to toughen its standards on subprime lending. In his continuing effort to bring economic
security, prosperity, and opportunity to all Americans, Chairman Dodd has been raising awareness
of predatory lending practices in the subprime mortgage market and urging regulators to apply
the same guidelines to the subprime market that the prime market receives. Such guidelines
would help protect vulnerable borrowers from mortgages they cannot afford, and in doing so
may help curb the rising foreclosure rates and defaults on home loans occurring across the
country. Chairman Dodd sent a letter to the regulators on December 7, held a hearing on predatory
lending practices on February 7, and also raised the issue with Fed Chairman Ben Bernanke
when he testified before the Committee on February 14.

"It is vitally important that we encourage home ownership. It is a core element of the
American dream. But for far too many families that dream becomes a nightmare when certain
predatory lending products and practices strip them of their equity and trap them in unaffordable
mortgages leading ultimately, in far too many cases, to foreclosure.

"I want to congratulate Freddie Mac for its leadership in announcing today that it will
only buy subprime ARMs that are underwritten to the fully-indexed rate. This is a responsible
standard that ensures that these borrowers will have the ability to repay their loans,
thereby protecting their home equity. This is the right thing to do both for the borrowers
and for Freddie Mac.

"I call on Fannie Mae and the Federal Home Loan Banks to adopt this policy as quickly
as possible. I also hope that the federal financial institutions regulators will also move
to quickly extend the exotic mortgage guidance to the subprime ARM market, as several members
of the Senate Banking Committee have urged. As I have said repeatedly, there is no justification
for providing fewer protections to vulnerable subprime borrowers, who are disproportionately
black and Hispanic, and less able to withstand payment shocks, than have been provided
to prime borrowers. The time to act is now.

"Freddie Mac has shown real leadership in protecting consumers from abusive and predatory
lending practices. I applaud their willingness to take this step."